KiwiSaver membership
Impact of subsequent “conscious choice”
Limiting opt outs to employment enrolments only
Kiwisaver – member tax credit information
IMPACT OF SUBSEQUENT “CONSCIOUS CHOICE”
Clauses 205 to 211
Submission
(ANZ)
We support the amendment to allow minors who have been incorrectly enrolled to opt out should they wish to. We do however propose that the amendments specify that the opt out criteria for minors will not apply if the member has made a conscious decision about their choice of KiwiSaver provider or fund.
Comment
Minors who have been incorrectly enrolled by their employer but who have, either with the consent of their guardians (if still a minor) or independently (if over the age of 18), subsequently contracted directly with a provider should not be able to opt out under this proposal. This later action should serve to validate their earlier incorrect enrolment.
Recommendation
That the submission be accepted, subject to officials' comments.
LIMITING OPT OUTS TO EMPLOYMENT ENROLMENTS ONLY
Submission
(Chartered Accountants Australia and New Zealand)
We submit that “incorrectly enrolled” should be defined so it occurs only in an employment situation and would not include an enrolment of a minor by a parent or guardian prior to the minor’s employment.
Comment
New section 59CB only applies to taxpayers who have been incorrectly enrolled due to an error in the application of the automatic enrolment rules, or who have incorrectly been allowed to “opt in” via their employer. It does not allow opt outs in relation to enrolments made on behalf of a minor by their parent or guardian.
Recommendation
That the submission be declined.
DRAFTING ERROR
Clause 205
Submission
(EY)
The automatic enrolment criteria proposed new section 10 are cumulative. An automatic enrolment will be treated as a “mistaken” enrolment if any one or more of those criteria is not met. As drafted, however, the proposed new section 59A(b)(i) would appear to treat an automatic enrolment as a mistaken enrolment only if there was a failure to meet all three criteria listed. We therefore suggest the wording be revised.
Comment
The drafting achieves the correct result. New section 59A(b)(i) says that a person who fails to meet the requirements of section 10(a), (b) and (c)(iii) may be treated as “mistakenly” enrolled. If a person failed any one of those three requirements, they would pass the test in section 59A(b)(i).
Officials accept, however, that the clause could be made clearer and will redraft to this effect.
Recommendation
That the submission be accepted.
KIWISAVER – MEMBER TAX CREDIT INFORMATION
Clause 213
Issue: Privacy protocols
Submission
(Chartered Accountants Australia and New Zealand)
Chartered Accountants Australia and New Zealand (CAANZ) support allowing the Commissioner and KiwiSaver fund providers to share information for account maintenance purposes only. Nevertheless, CAANZ has also suggested that:
- KiwiSaver providers should be asked to sign a protocol agreeing to use information only for account maintenance purposes before the information is released by Inland Revenue; and
- KiwiSaver members should be asked to tick a box if they are happy for their details to be shared with other KiwiSaver providers.
Comment
KiwiSaver fund providers have all entered into a Scheme Provider Agreement with the Commissioner prior to registering their KiwiSaver scheme with the Financial Markets Authority.
That agreement includes a contractual restriction on the use of member/taxpayer information. Accordingly, it does not appear that the addition of a new privacy protocol would add anything further to that restriction as fund providers already receive information about KiwiSaver members, which can only be used for KiwiSaver administration purposes.
We disagree with the suggestion that a tick box should be used by KiwiSaver members to provide consent for member tax credit information about them to be shared with other KiwiSaver providers. This is because there are already sufficient exceptions to the privacy requirements, including that an agency can share the information concerned to allow Inland Revenue to maintain the Inland Revenue Acts, and to protect the public revenue.
Recommendation
That the submission be declined.
Issue: Information sharing requirements
Submission
(ANZ)
ANZ has expressed general support for the proposal which enables the sharing of more information between the Commissioner and KiwiSaver providers. However, ANZ has also said that:
- The Bill will likely necessitate changes to its IT systems in order to meet the proposed information sharing requirements. ANZ therefore welcomes discussion with officials on what the additional information sharing requirements will look like from a technology perspective; and
- New section 220B(1)(c)(v) should be redrafted to specifically state what member tax credit information will be shared. A possible drafting solution is to use the same wording in section 56(3)(c)(vi) of the KiwiSaver Act to achieve this.
Comment
With regard to the point about ANZ’s expected IT systems changes as a result of the proposal, officials consider that this is a question of administration, not of potential amendment to legislation. Accordingly, the KiwiSaver Act does not prescribe the mechanism for any information sharing, and there appears to be no reason for prescribing such a mechanism in this case by way of an amendment to the rules.
Officials consider that the second suggestion to specify what member tax credit information could be shared, would give rise to systems changes and therefore cost implications for KiwiSaver fund providers. If fund providers are able to participate in terms of being able to transfer certain member tax credit information from old providers to new providers they will be able to do so by virtue of new section 220B(1)(c)(v) as proposed under the Bill.
Nevertheless, officials are happy to work with KiwiSaver fund providers regarding the additional time they may need to implement system changes that are expected to arise out of the proposed information sharing requirements.
Recommendation
That the submission be declined. However, the submission should be noted to the extent that if any KiwiSaver fund provider requires additional time to implement system changes, officials will work with them in that regard.
Issue: Support for the proposal
Submission
(KPMG, Office of the Privacy Commissioner, ANZ, Chartered Accountants Australia and New Zealand)
Four submitters expressed their general support for the proposal which enables the sharing of more information between the Commissioner and KiwiSaver providers to support the administration of the KiwiSaver Scheme.
Comment
Officials note the general support for the proposed amendment.
Recommendation
That the submission be noted.